Xiaoning et al v. Yahoo! Inc, et al

Filing 57

MOTION for Protective Order Governing Confidential Information; Memorandum of Points and Authorities in Support filed by Yahoo! Inc.. Motion Hearing set for 9/20/2007 02:00 PM in Courtroom 2, 4th Floor, Oakland. (Attachments: # 1 Proposed Order)(Petrocelli, Daniel) (Filed on 8/15/2007)

Xiaoning et al v. Yahoo! Inc, et al

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Case 4:07-cv-02151-CW

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DANIEL M. PETROCELLI ( 5.^. #97802) dt^et^ocelli ( lomm. com a MATTHËW T. KLINE ( s.^. #211640) mkl^ne (alomm.com

O'MELVENY & MYERS LLP 1999 Avenue Of The Stars Los Angeles , California 90067-6035 Main Number : [phone] Facsimile : [phone] Attorneys for Defendant YAHOO!, INC. and Specially Appearing Defendant YAHOO! HONG KONG, LTD. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION WANG XIAONING, YU LING, SHI TAO, and ADDITIONAL PRESENTLY UNNAMED AND TO BE IDENTIFIED INDIVIDUALS, Plaintiff, v. YAHOO!, INC., a Delaware Corporation, YAHOO! HONG KONG, LTD., a Foreign Subsidiary of Yahoo!, ALIBABA.COM, INC. a Delaware Corporation, AND OTHER PRESENTLY UNNAMED AND TO BE IDENTIFIED 1NDNIDUAL EMPLOYEES OF SAID CORPOØTIONS, Defendant. Date: September 20, 2007 Time: 2:00 p.m. Location: Courtroom 2 Judge: Hon. Claudia Wílken Case No. C07-02151 CW DEFENDANTS ' MOTION FOR PROTECTIVE ORDER GOVERNING CONFIDENTIAL INFORMATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT

TO PLAINTIFFS AND THEØ COUNSEL OF RECORD: PLEASE TAKE NOTICE THAT ON September 20, 2007, at 2:00 p.m ín Courtroom 2, 4th Floor, United States Courthouse, 1301 Clay Street, Oakland, California, defendant Yahoo!, Inc. ("Yahoo!") and specially appearing defendant Yahoo! Hong Kong Ltd. ("YHKI.,") wí11 and hereby do move for the entry of a Protective Order governing the disclosure of confidential information ín this action. This motion for a protective order ís brought pursuant to Rule 26(c) of the Federal Rules of Civil Procedure on the grounds that good cause exists to award protective relief to limit the disclosure and dissemination of defendants' trade secrets and confidential
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commercial ínformat^on. Defendants' proposed Protective Order, which ís based on the Northern District of Calíforn^a's form stipulated protective order, provides necessary safeguards for the parties to produce sensitive and confidential information ín this action. This motion ís based on this Notice of Motion and Motion, the pleadings on file ín this matter, the following Memorandum of Points and Authorities, the [Proposed] Protective Order and Declaration of Matthew T. Kline filed concurrently herewith, and any further argument the Court might allow. YHKL joins this motion without waiving, and specifically reserving, its objection to the exercise of personal jurisdiction ín this case. Dated: August 15, 2007 DANIEL M. PETROCELLI MATTHEW T. KLINE O'MELVENY & MYERS LLP

^y:
Daniel M. Petrocelli Attorneys for Defendant YAHOO!, INC. and Specially Appearing Defendant YAHOO! HONG KONG, LTD

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I.

INTRODUCTION Defendants seek the entry of a standard protective order preventing the dissemination of

evidence the parties designate "confidential." The parties have met and conferred and agree on the need for the protection of confidential material, but not on the terms of a protective order. Defendants require the protective order they propose, ín part, because YHKL wí11 soon be filing a motion to dismiss for lack of personal jurisdiction, and YHKL's briefing wí11 make reference to trade secrets regarding YHKL's business and the extent of its contacts to California. A protective order wí11 also be required to cover certain discovery in this case. II. MEET AND CONFER EFFORTS Defendants sought to negotiate a stipulated protective order with plaintiffs. See Decl. of Matthew T. Kline in Support of Defs.' Mot. for Entry of a Protective Order ¶^ 3-5 ("Kline Decl.") (fled herewith). On July 26, 2007, defendants sent plaintiffs a draft protective order, which was based on the Northern District of California's form protective order. See id. ^ 3. (For the Court's convenience, a redline showing the minor differences between the form order and defendants proposed order ís attached. See id. ^ 2, Ex. A.) After exchanging several emaíls, the parties met and conferred telephonically on August 8, 2007, and continued to exchange emails discussing this matter over the past week. fd. Exs. B, C. Efforts to reach a stipulated protective order proved unsuccessful. Plaintiffs demanded that the protective order include provisions that were, ín defendants' view, unnecessary and burdensome, as explained below. III. ARGUMENT
A. A Protective Order to Is Needed to Safeguard Conf^dentíal Information.

"[F]or good cause shown," the Court may issue protective orders limiting or setting conditions on the disclosure of "trade secret[s] or other confidential research, development, or commercial information ...." F^1^. R. Cw. P. 26(c)(7); see also SCHWARZER ^^ At., CAL. PRAC. Gu 1^ E: FE^^. C v. PRO. BEFORE TRIAL, § 11:1110 (Rutter 2007). Courts routinely issue orders granting confidential status to trade secrets and sensitive commercial and other information. See, e.g., Slade v. Gates, No. CV 01-8244-RMT (EX), 2003 WL 21920285, at *1 (C.D. Cal. July 30,

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2003) (limiting disclosure of confidential documents to counsel only); Official Z^^secured C07-02151 CW
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Creditors Comm. of Media Vision Tech., Inc. v. Jain, 215 F.R.D. 587, 590 (N.D. Cal. 2003) (same ); ICG Commc'ns, Inc. v. Allegiance Telecomm., 211 F.R.D. 610, 615 (N.D. Cal. 2002) (same ); Upjohn Co. v. Hygieia Biological Labs., 151 F . R.D. 355 , 361 (E.D. Cal. 1993) (same); Nat'l Mortgage Equity Corp. Mortgage Pool Certificates Sec. Litig., 120 F.R.D. 687, 692 (C.D. Cal. 1988) (same); Davidson Pipe Co. v. Laventhol and Horvath, 120 F.R.D. 455, 465 (S .D.N.Y. 1988 ) (same ); GTE Prods. Corp. v. Gee, 112 F.R.D. 169 , 172 (D. Mass. 1986 ) (same); Pfeiffer v. K-Mart Corp., 106 F.R.D. 235 , 236-37 (S.D. Fla. 1985) (same). To justify the entry of a protective order, a party need only make a "threshold showing of good cause to believe that discovery will involve confidential or protected ínfor^^^ation." Parkway Gallery Furniture , Inc. v. Kittinger/Pennsylvania House Group, Inc., 121 F.R.D. 264, 268 (M.D . N.C. 1988). Indeed , "[a] `blanket' protective order ( e.g., forbidding each party from disclosing any information produced ín discovery absent permission from the other party or the court) ís often obtained without a substantial showing of good cause for each document covered by the order." SCHWARZER E^ Az., supra, § 11:1126.5. This action ís likely to involve disclosure of confidential, proprietary , and private information that should be protected from public dissemination . Such information includes confidential financial and technological information regarding defendants' businesses. Plaintiffs, too, may seek to protect certain information of their own, especially if they urge ít is necessary to avoid the risk of reprisals from the Chinese government.
More immediately, YHKL requires a protective order to protect information relevant to its upcoming motion to dismiss for lack of personal jurisdiction . Specifically , YHKL intends to provide confidential financial and technical information to demonstrate its absence of significant contacts with California and its presence ín Hong Kong as a separate , independent business and corporate entity. Both Yahoo ! and YHKL operate web portals offering a variety of Internet-based services. Both companies , as do their competitors and peers , consider details concerning the number and origin of visitors to their websítes to be sensitive , trade-secret information. See Kline Decl. ^[^ ^ - 7. Indeed, even the methods that Yahoo! and YHKL use to track the traffic on their websítes are proprietary . See id. Public disclosure of these details would be detrimental of the C07-02151 CW
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competitive interests of both Yahoo! and YHKI.,. See id. Hence, there ís good cause to enter the order defendants seek.I B. The Protective Order Defendants Proposed Is Appropriate.

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Defendants' proposed protective order ís based on this Court's standard form order and will protect the parties' interests. Plaintiffs do not dispute that a protective order ís appropriate for certain documents. Nor have they proposed an alternative order of their own. Instead, they raise four general concerns about the order, and every time we have asked for specific line edits to address their concerns, they have declined to provide any. 1. Plaintiffs' first objection ís that the protective order is too broad. See Kline Ex. C at 3, ^¶ 1-2. Plaintiffs cite no law for this general proposition, nor could they, as the order defendants propose tracks this Court's form order, which is made available to litigant's on the Court's websíte. See id. ^ 2; cf. Wood v. vista Ma ^^ or Nursing Center, No. C 0^-01682-JW (PVT), 2007 WL 832933 (N.D. Cal. Mar. 14, 2007) (using N.D. Cal. model protective order). 2. In their second objection, plaintiffs ask defendants to include a provision ín the order requiring the parties to explain each and every confidentiality designation they make. This ís unnecessary and only designed to deter reliance on the protective order. See Kline Decl. Ex. C at 3, ^^ 2-3. As ít currently drafted, Section 5.1 of the Court's form order (and defendants' proposed order) instructs parties not to over-designate documents as conf^dentíal. Section 6 provides plaintiffs the means to challenge any designation they dispute. Plaíntíffs have neither contended nor proven that defendants wí11 indíscrím^nately designate documents as confidential. Moreover, unlike privilege logs-which make sense, because the opposing party never sees privileged documents its opponent withholds-a confidentiality log is make-work. Plaíntíffs' counsel wí11 see the documents defendants mark "confidential" and can object to these designations íf they so choose.

1 Since this Motion for a Protective Order will be heard after YHKL files its motion to dismiss, YHKL wí11 provide any confidential evidence supporting its motion after the Court enters a protective order. See Kline Decl. ^ 8.
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3. Pla^ntíffs' third objection ís that, íf documents marked confidential become public by means other than improper leaks, the documents should no longer be treated as confidential. See id. at 3, ^( 4. Again, this objection is designed to further dilute the protection afforded by the Court's form order. As we explained to plaintiffs, Section 6 of the proposed order provides them the means to argue that documents should no longer be treated as confidential if and when they have become public in a legitimate way. See id. Ex. B at 2. 4. Plaintiffs last objection ís to require that no protective be entered unless ít is "link[ed] to the discovery process." See id. at 3. This, too, ís inappropriate. Plaíntíffs have not explained what ít means to "link" the protective order to the discovery process, or why ít ís necessary to include such cryptic language. As best we can discern, plaintiffs appear to be saying they wí11 not agree to a protective order unless defendants commit to commence discovery. See id. But as we have informed plaintiffs' counsel, this is not sensible, appropriate, or necessary. Discovery will proceed ín accordance with the applicable rules and orders of the Court. To the extent defendants have objections to discovery ín whole or in part, they cannot and wí11 not stipulate them away as a quid pro quo for plaintiffs' agreement to a protective order. Furthermore, ín light of YHKL's impending motion to dismiss, a protective order is required independent of discovery. IV. CONCLUSION Defendants motion should be granted. Dated: August 15, 2007 DANIEL M. PETROCELLI MATTHEW T. KLINE O'MELVENY & MYERS LLP By: Daniel M. Petrocelli Attorneys for Defendant YAHOO!, INC. and Specially Appearing Defendant YAHOO! HONG KONG, LTD.

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